Omnicom Secures Ad Deal With Instagram

Omnicom has entered
into a big ad pact with Instagram, but, contrary to reports, the holding company is not about to spend anywhere near $100 million on the platform.

“Instagram will work closely with
OMG’s creative agencies to develop best practices for content that inspires and engages the Instagram community,” a source close to the situation told Social Media & Marketing
Daily on Friday. “Not a typical agency deal ... this partnership extends beyond traditional media relationships.”

AdAge broke the news on Friday, reporting
that OMG is ready to pump up to $100 million into Instagram over the next year. But “the price tag is inaccurate,” our source said.

Officially, OMG and Instagram each confirmed the
deal on Friday, but declined to discuss details at this time.

“Our teams are going to work hand in hand to develop and execute campaigns that provide people with amazing imagery -- and
drive meaningful business results for advertisers,” Instagram said in a statement.

“This doesn’t change our advertising strategy moving forward,” the Facebook unit made
clear in its statement. “People will continue to see a limited number of beautiful, high–quality photos and videos from select brands who already have a strong presence on
Instagram.”

Social marketing experts applauded OMG’s move on Friday.

“Instagram's access to Facebook profile data will go far beyond age and gender and open up
the unique targeting and analytics possibilities that only social data can deliver,” said Jon Elvekrog, cofounder and CEO of social marketing agency 140 Proof.

“By emphasizing that
these ads will be manually and selectively placed, Instagram is adding to the definition of ‘native,’” Elvekrog explained. “Not just a form-factor or a presence in a feed, the
ad itself has to be a quality-level fit on the platform.”

Instagram, which Facebook scooped up for about $1 billion in 2012, has only been in the ad business since late last year. But brands from Calvin Klein to L'Oreal to Honda to U-Haul can’t get enough of the popular photo-sharing platform.

A recent
report from L2 found that Instagram outshined other social platforms last year,
particularly among prestige brands.

“Instagram has demonstrated more traction than any other platform in 2013, and it registered the strongest year-on-year growth among mobile
apps,” L2 founder Scott Galloway explained in the report. “It's an obvious choice for consumer brands.”

Among other attractive qualities, brands are loving the level of
engagement that Instagram is commanding among users. Indeed, they spend 257 minutes on the platform per month -- with 57% interacting daily, and 35% more than once a day – according to L2.

And there’s plenty of room for growth. At present, according to L2, only about 16% of online adults with income of more than $75,000 now use Instagram. Among all social networks, Instagram
boasted the biggest growth rate (about 23%) between the second and fourth quarters of last year, ccording to Global Web Index’s latest social summary report.

As a result, Instagram was
the fastest-growing app last year -- as its audience surged 66% to 32 million -- according to Nielsen.